How A24 Keeps Making Hit Films

You're not gonna deceive me today, right Ben? I don't have anything to deceive you on, of course I'm not deceiving you. I'm engaging with you as a human being. You're being real right now. I'm always being real. I am not Elizabeth Holmes, I'm not out to deceive anybody. If I specifically became a journalist, not an actor. That's our colleague Ben Fritz. He writes about the entertainment industry and he, like so many of us, has recently seen the new documentary "You Can See Everything". On his surface, it is about the last few weeks before Elizabeth Holmes went to prison during which Nathan Fielder and the filmmaker Lance Oppenheim spent 34 days with Holmes and her partner and their two young children documenting everything about their lives and talking to her about whether she really was guilty of the crimes that she was convicted of, which of course she believes she is not. So where did things get lost, like how are you where you are right now? I wish I knew, I don't know, I don't, I don't feel like I understand that. And then the film continues after she goes to prison in some, what can I say, some very surprising and bizarre ways. I guess I would say that the film gets very meta. The movie was made by A24. The independent studio is having an exceptionally good year. From the Gen Z horror movie "Backrooms" to Oscar contenders like "Prime Time" in the invite, A24 has done something incredible. They critically acclaimed movies, make money, and get young people excited about Hollywood again. A24 is by far the most successful independent film company in the entertainment industry right now. And most importantly, they've created a brand that is really meaningful for young audiences. A lot of people go to see A24 movies because they are A24 movies. It's become kind of a brand that's as powerful for young fans of indie cinema as like Disney is for families. How surprising is it what A24 has built? It's pretty shocking, you know what I mean? I think a decade ago everybody thought that young people were losing interest in the movies and it was all about social media, short form video, video games, etc. But what A24 has done really remarkably is they have harnessed social media and in a kind of countercultural way, A24 has made film cool again for at least a certain set of young adults. Welcome to the journal, our show about money, business, and power. I'm Ryan Knudsen. It's Wednesday, October 28th. Coming up on the show, you can hear everything about A24. I want to start by talking about how this movie, you can see everything was so top secret for a while. What was it? Can you tell me the story of how it came to life for the first time? The existence of this film, all through production, which was three years, was barely known to anybody outside of the tiny crew and fewer than ten people who work at A24. And there are something like 300 people who work there. So that's really remarkable. I mean Hollywood is the most gossipy industry in the world. So the fact that they kept it so secret even within their own company was extraordinary. And at first, it was part of the project, it was like kind of necessary for them as they figured out what this film was going to be. And then it got closer to completion, A24 kind of realized that the secrecy would actually be a really effective marketing tool. So they didn't even announce it was coming until literally the first step was in June, an executive at A24 texted the director of the Telluride Film Festival and just told her, and we actually have seen the text, that all this text said was have something of note to talk to you about. The director of the Telluride Film Festival agreed to show the movie without revealing what it was. And so then in early September, a month that I had before the film came out, about 650 people went into a theater, they all had to lock their phones in a yonder pouch. And didn't you do the people that went to this premiere, the 600 people that they know what they were about to see? No, they did not know what it knew us. And it turned out to be, you can see everything. And that started the unbelievable buzz that, you know, kind of built up over about six weeks. And with really a really executed marketing plan because the buzz really, it's foreshendo just as the film opened. And so how has it opened since it, since it had theaters? It's done remarkably well. It's opening weekend was 15.6 million dollars. It's second weekend was 19.5 million dollars. Of course, 45 million dollars so far is at the time we're recording this, which for a documentary, particularly one that doesn't like have any music stars in it, is really extraordinary. I mean, this is on track to be one of, if not the highest grossing non-music documentaries ever. So tell me the story of how this movie got made. How did it end up at A24? Well, what's really interesting is that a little bit of Holmes and her partner, Billy Evans, they actually reached out to A24. They were interested in making a documentary and they knew enough about A24 to think this is a company that they wanted to work with. At first, A24 passed because they were like, you know, you can imagine that if Elizabeth Holmes and Billy Evans were initiating that they thought this would be maybe like a pretty puffy documentary that they controlled, and this is not the kind of thing A24 would do, they really care about working with prestige filmmakers or promising young filmmakers they believe in. And since there were not even any filmmakers attached, A24 decided they didn't want to do it initially. But rumor of the pitch soon made its way to the comedian Nathan Fielder and a young acclaimed documentary filmmaker Lance Oppenheim. Last month, after a screening, Oppenheim talked about the origin of the film. It started when he was with Fielder at a magic club in L.A. A magician asked the audience for the name of a celebrity and someone yelled Elizabeth Holmes. And then the magic show ended. I was like, it's so interesting, Elizabeth Holmes and Nathan's like, what's interesting? And I was like, well, I just heard that she had heard that she was looking for someone to document her life and that she had reached out to A24, which I thought was strange. And so they talked to A24 and next thing you know, there's this seven person film crew in the mental home where Elizabeth Holmes and Billy Evans and their kids were living, starting about 34 days before she went to prison. One of the strangest things about this movie is the pairing of Fielder, the deadpan comedian who leans into the uncomfortable in Holmes, the disgraced founder of Thernos. Fielder was not a household name, but A24 took a bet on his creative talents, something the studio has a reputation for. Nathan Fielder is not a serious documentary maker at all. He makes nonfiction programming that's very meta, right? Like Nathan for you was about him coming in and running businesses that he had no idea had a run, but it's about deep-seated things in the way humans deal with each other and the way our society runs. And he is a very quirky personality to say the least. So he was never going to make a straight ahead documentary at all. Now we'll say, A24 is a studio that takes a lot of risks. They make a lot of bizarre movies you didn't see coming. They were the ones who took an internet meme and turned it into back rooms. Just for one example, they had a movie called The Drama this year that mixes the threat of mass shootings with a wedding and it's a comedy, if you can believe it. So they make unusual movies and basically if they believe in a filmmaker, they're willing to take a bet. They believe in both field and Oppenheim and at first, you know, it was very cheap, right? They're just sending a small crew to homes in Evans House and they weren't even sure they'd get a movie out of it. They were like, let's just see what we get and see if there's a movie here. Coming up, the business model behind A24. A24 was a startup founded in 2012 by three people, Daniel Katz, David Finkl and John Hodges. That secured seed money from the investment from Guggenheim partners where he used to work. And the idea was that they could help fill the hole in what was in a already dwindling independent film market by focusing on social media marketing, which would cost a lot less of course than TV ads and which is a younger audience than like print newspaper ads. I'm sorry to say. A key part of their strategy was to make movies with smaller budgets, unlike the blockbusters that dominated Hollywood at the time. Well, the whole independent film business was withering and they've been really being in the 1990s. of like the rise up mirror-maxing of films like Little the sunshine. Those movies were not doing as well. Disney had sold Miramax by this point. Everybody would feel they set out a franchise movies at this time, like Marvel and Fast Infurius were taking over the film business. And little independent movies that came out of Sundance or something were just, they were losing attention, they were losing market shares, becoming a worse and worse business. So for a new studio to launch with a focus on that business, it seemed very unusual. It didn't make sense on its face. And then their marketing playbook was unusual because the idea for independent film had always been, well, if you want to reach a prestige audience, it's all about getting good reviews in newspapers and magazines, getting the critics to like it, running print ads in those in those papers where like high-end, affluent moviegoers find what they want to watch. And maybe if your film is breaking out enough, you start buying some TV ads. Social media was pretty young at that point. And the idea of marketing on it was a bit of a novelty. So for a studio to launch, and for that to be their focus, was an entirely new thing for Hollywood. So 824 kind of reinvented how to market a film using social media. But also the films they were making were good. Absolutely. Yes, 824 really became known for, I would say, unusual twists on something you think you know. They identified a lot of like emerging filmmakers who went on to become big. The first movie 824 distributed was called a glimpse inside the mind of Charles Swan III. It had all the trappings of an 824 movie today, a buzzy director and Roman Coppola, a slightly off the wall surrealist plot, and a talented cast, including Bill Murray and Patricia Arquette. But it was a commercial and critical failure. 824 had a big breakout moment with the movie Moonlight, which won best picture at the Oscars in 2017. And you might remember this was the time they accidentally announced the wrong movie. This is not a joke. Moonlight is one best picture. Moonlight. Best picture. They made films that were simultaneously like well respected by critics and eventually by the Oscars. And but we're also actually seemed cool and interesting to young people because they weren't the most down the middle obvious like Oscar bait films at all. And they started making horror movies that were not cheap, shock, shocking and exploitative that were actually really smart horror movies. There was the witch, it was hereditary, it was mid-summer, and actors followed suit, wanting to work with in-demand directors at the edgy studio. Robert Pattinson, for instance, made six 824 movies. 824 is not invincible though I assume. What's its actual batting after it comes to hits versus flops? I mean, it's actually, it's good, but it is not extraordinary. 824 has had plenty of flops. They just released a Chris Rock movie that I'm sure you haven't heard of called Misty Green. Nope. That, yeah, literally, let's see here if I can find what it grossed. It came out right around the same time as you can see everything. It's grossed $160,000. I'm sorry, $160,000? That's it. That's it. That's everything. That's all the ticket sales they've had. Wow. I'm sure it didn't even pay for the catering on the movie. And they have their share of flops, but their flops are usually at least interesting. You know, they're not making it like just really lame, lame cash in attempts that fail. But there are two things that they made it stand out. One is that even amongst their share of hits and flops, they built this brand. They built a brand that is meaningful. And if you're a private equity and venture capital backed company, which 824 is having a brand that has real equity in it is so meaningful because that means the value of the company is not just the cash flow from its films, but there's real brand equity there. Most of people are loyal to the 824 brand. The studio has a robust merch shop on its website with final editions of movie soundtracks and things like mugs from the fictional businesses and the movie backgrounds. There's even a Robert Pattinson nesting doll. I think we've started to see this sort of virtuous cycle where the more known and respected their brand is, the better their films do because people know that 824 means and they want to see movie because it's a 24 movie. 824 is now moving beyond the silver screen. It has a growing TV business, but it shows euphoria and beef. It's branching into fashion with a partnership with Dior. It's got a music business. It bought an off-Broadway theater in New York and it's expanding internationally. They already have a UK office and they've had talks with potential partners in other countries. The idea is to find emerging 824 style filmmakers in other countries so they could eventually expand globally. In the past, I would say indie studios that succeed like 824, usually the playbook is you then get bought by a major studio, but 824 and its investors seem like that's not what they're going for. They're going for global expansion. How hard do they think it will be for 824 to maintain this cool? It's going to be a challenge because the more they grow, the more opportunities they're hard for them to with and inevitably as you get bigger, you just become more corporate. It's very hard to avoid that. One example of that is a recent deal 824 made with Google to do research together on AI filmmaking tools. There was a lot of fan blowback. I would say it's kind of the worst PR event that 824 has had in its history. People online were calling them AI24 and saying that they were betraying the artists and betraying their artistic integrity. They've had plenty of hits since then so it didn't destroy the company but it was a dent in their armor for sure. The 824 partner who oversees technologies said the new tools won't look anything like the quote, "type of AI that people feel uncomfortable with." These days, there's a lot of hand-ranging in Hollywood about dwindling ticket sales and stale franchises. But Ben says that 824 is kind of a beacon, especially when it comes to younger audiences. It's not just about the quality of the film, it's about really can you build a brand and a marketing machine that's really effective online. It speaks to young people where they are and in order to do that, you have to have a brand that they care about and trust. And I would say surprise is kind of the currency of social media, right? And if you can do that in films, you actually can get people to come out. So it proves that film at least could have a much healthier future than a lot of people feared, but that it kind of takes a new playbook. Okay. All right. Good shot. Okay. It was good to chat with you, Ryan. I've been completely honest with you about everything I've said, because I have no reason to deceive you. That's all for today, Wednesday, October 28th. The journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode by John Jergenson. Thanks for listening. See you tomorrow.